Expect A Robust Expansion Plan From Interxion Holding, Says Bank Of America

Bank of America Merrill Lynch analysts see a strong expansion plan from Interxion Holding NV INXN. The brokerage boosted its price objective on shares to $39.00 from $36.00.

"Our revised price objectives are based on a more constructive outlook with regard to near term pricing and demand trends, consistent with our recent PO changes for CONE, COR and QTS on June 17. Our more constructive outlook is based on recent meetings with data center providers at the 2016 NAREIT conference in New York, dinner with CBRE's data center solutions group and investor meetings we hosted in New York with Digital Realty and QTS," the analysts said in a note.

The analysts pointed out some of the key issues and topics that dominated the meetings: current pricing, demand trends, and hyper scale cloud customer activities. Also, M&A opportunities and capital markets activity. Pricing and demand trends remain strong to enhancing.

The brokerage expects enhancing fundamentals to support premium multiples. The analyst added, "We believe improving fundamental trends support premium multiples relative to the REIT group average….Our Interxion price objective is based on a target 2017 EBITDA multiple of 14.1x. We have applied a discount to the group based on customer concentration and portfolio."

Following the news, the stock traded 1.58 percent higher on Tuesday.